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Late time cards a headache but no reason to withhold pay

You’d think employees would be eager enough for their paychecks that they would make sure to turn in time sheets promptly. But that’s not always the case, and employers may be tempted to withhold pay as a not-so-gentle reminder for workers to submit their hours on time. That’s temptation best avoided, though, according to attorneys who help employers stay in compliance with wage and hour laws. 

Recently, an employer asked whether it’s legal to establish a policy stating that if employees don’t turn in time cards at a specified time they won’t get paid. As tempting as that policy sounds to employers burdened by tardy time cards, it’s not allowed under the federal Fair Labor Standards Act (FLSA), the attorneys say.

“Under the FLSA, it’s the employer’s obligation to keep records of the hours worked by employees,” Reggie Gay, an attorney with the McNair Law Firm, P.A. in Greenville, South Carolina, says. “An employer will typically request that employees complete time sheets or time cards and rely on its workers to provide information about their hours worked, but the ultimate responsibility for such record keeping falls on the employer.”

So what recourse does an employer have if an employee doesn’t submit information needed to issue a paycheck? Gay says to contact the employee to try to establish the number of hours worked during the pay period. Also, the employer can check with the employee’s supervisor or coworkers to determine the hours worked.

The employer should pay the errant employee the amount it believes in good faith covers the time actually worked. “Any disputes can be addressed later,” Gay says.

Ryan B. Frazier, an attorney with Kirton McConkie in Salt Lake City, Utah, agrees that the FLSA prohibits withholding pay to employees who fail to turn in time sheets but says employers are within their rights when they adopt policies requiring workers to turn in hours worked at a specified time. Employees violating that policy can be disciplined even though they must be paid for all time worked.

Frazier says the law prohibits withholding or diverting wages unless:

  • Required to do so by state or federal law;
  • Directed to do so by a court;
  • The employee expressly authorizes a deduction in writing; or
  • The withholding is authorized by law in other limited circumstances, such as deductions in accordance with retirement plans.

“I recommend you start by informing all employees that turning in time cards at a specified time is company policy and that they may be disciplined for failing to do so,” Frazier says. “Then, follow through on your policy.”

Frazier advises writing up employees for initial offenses and taking stronger action for repeat offenses, possibly suspensions and termination “if the problem becomes sufficiently serious.”

When an employee doesn’t turn in hours worked, one option an employer has is to pay based on available information, such as the employee’s work schedule, Jonathan C. Sterling, an attorney with Carlton Fields Jorden Burt in Hartford, Connecticut, says.

Employers can check time other ways, too. “It can create bookkeeping issues when employees don’t turn in time cards and you have no idea what the actual payroll amount should be,” Jo Ellen Whitney, an attorney with the Davis Brown Law Firm in Des Moines, Iowa, says. “In that situation, evaluate the employee’s average hours worked and pay her the amount that covers those hours. If the employee actually worked more or fewer hours, you will have to address the discrepancy in a future paycheck.”

Jason Ritchie, an attorney with Holland & Hart LLP in Billings, Montana, urges employers to adopt a clear policy stating time card procedures and deadlines.

“Make sure you’ve informed employees about your policy,” Ritchie says. “Then, if an employee fails to complete or turn in a time card on time, you may discipline him for violating company policy. That discipline may not be delaying or denying his pay, however.”

Need to learn more?
Have you discovered (or maybe you suspect) that your company improperly withholds pay or commits some other wage and hour violation? Periodic internal payroll audits can help you make sure your organization complies with employment and tax laws. They are also key to verifying payroll record accuracy—and fixing errors before the IRS or another agency find them for you.So who should conduct your audit — someone in-house or a third party? Regardless of the route you choose, you need to know ALL the steps to leave no stone unturned.  Tune in December 9 to the BLR webinar Internal Payroll Audits: How to Correct Compliance Errors and Detect Fraud when our presenter, a skilled employment tax consultant, will teach you how to conduct a successful payroll audit, so you’ll be armed to identify compliance mistakes, spot fraud, and devise a plan to correct payroll issues.  For attending this event, you’ll also receive checklists on the most common types of payroll fraud, the payroll system reviews CPA firms conduct, and what to look for when evaluating payroll systems. For more information, go to

2 thoughts on “Late time cards a headache but no reason to withhold pay”

  1. Federal law always supersedes state law and it appears that Montana law is in opposition to the Fair Labor Standards Act, in section 3), particularly. PLEASE ADVISE!

    Sec. 39-3-204 MCA. Payment of wages generally.
    (1) Except as provided in subsections (2) and (3), every employer of labor in the state of Montana shall pay to each employee the wages earned by the employee in lawful money of the United States or checks on banks convertible into cash on demand at the full face value of the checks, and a person for whom labor has been performed may not withhold from any employee any wages earned or unpaid for a longer period than 10 business days after the wages are due and payable, except as provided in 39-3-205. However, reasonable deductions may be made for board, room, and other incidentals supplied by the employer, whenever the deductions are a part of the conditions of employment, or as otherwise provided for by law.
    (2) Wages…
    (3) If an employee submits a timesheet after the employer’s established deadline for processing employee timesheets for a particular time period and the employer does not pay the employee within the 10-day period provided for in subsection (1), the employer may pay the employee the wages due in the ensuing pay period. An employer may not withhold payment of the employee’s wages beyond the next ensuing pay period. If there is not an established time period or time when wages are due and payable, the pay period is presumed to be semimonthly in length.

  2. Great question! Montana wage and hour laws apply to every employer in Montana. The FLSA applies to hospitals, health care institutions, public sector employers, schools, most non-profits, trade associations and those private sector employers with $500,000 or more in revenue, or 2 or more employees engaged in interstate commerce. Most Montana employers are subject to both laws. When Montana wage and hour laws conflict with the FLSA, you apply the law that is most favorable to the employee. In this instance, the FLSA would be more favorable to the employee, so I would not deny or withhold payment until the next pay period. Instead, as Reggie Gay suggested in the article, I would contact the employee and his/her supervisor to establish the number of hours worked during the pay period and make payment for those hours. Of course, a Montana employer that is not subject to the FLSA could rely on the Montana statute you posted to defer payment to the next regular payday.

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